Tuesday, April 18, 2017

If I Were the Nintendo Strategy King For a Day

We are about 6 weeks into the life span of the Nintendo Switch and I’m really enjoying it so far. Sure it has its warts but what system doesn’t? One thing I’m doing more than I thought I would is playing the system in handheld mode. I’ve played it in parks, hotel bars, and even an airplane. I’ve inadvertently turned into a Switch evangelist with my love for Zelda and how well Nintendo pulled off a mobile console that allows for deep meaningful game play heretofore unheard of.

Along the way it did something else. It ruined the 3DS for me. I mean just flat, “I don’t want to play on it anymore.” It’s a shame too because there are some gems of games on there. It’s like intentionally handicapping myself. Why would I want to? And it’s not just that the games don’t look as good. I do play retro games so that has only marginal impact on me. [Heck I even hosted a retro MMO gaming series for MMORPG.com before retro gaming was cool.] It’s just not as complete of a gaming experience and I can now have complete gaming experiences on the go.

The Neon One is All the Rage
I’m now going to put on my corporate strategist hat and talk about what I would do if I was left to set the strategy for big N for the next few years. They may even have a plan like this in place already and just aren’t ready to talk about it (I’d put money on it they do). But regardless, this is what would happen under my watch.

First I’d sunset the 3DS. As part of this process I’d evaluate all the first party games that are currently in development and see if they could pivot to Switch. If they couldn’t transition and we still had a projected return on investment, I’d continue the production on the 3DS version and release it if they could come out before the end of 2019. If development could make the pivot, I’d have the game release on the Switch.

I’d notify all third party developers that we planned on discontinuing production of the 3DS by the end of 2019. They in turn could continue to make new games for the 3DS (and with a giant install base that could be very possible) but that as a company Nintendo would shift their sites solely on the Switch.

Production would cease on all new 3DS (and 2DS) devices during the middles of 2019. I don’t know how quickly the inventory on a DS churns so I can’t say and exact date here. I would make sure that Nintendo produced enough retailers could have inventory to make it through the holiday season but not so many that there would be any left going into 2020.

To correspond with the sunset of the DS system of devices we’d announce the Switch 2.0. This would have an improved processor, better battery life, and increased internal memory. The increases of each would match the curve of the increase in technology. I would speculate that there would be at least 128g of internal memory and battery life would see a 10 - 20% increase. The target price for this console would still be $299.99. Switch 1.0 would have a price reduction to $199.99. This would align it with the current price of the New Nintendo 3DS.

From this point Nintendo should plan on releasing a new Switch every 24 months. The new Switches would release at roughly a $299.99 price point and push the previous switch to a $199.99 or possibly even $149.99 price point. If stock was still available from two generations previous that would be discounted to $99.99 creating three distinct price points for consumers to gain access to the Switch.
Peripherals for the different versions of the Switch would stay consistent across the generations. While the screen size of the Switch might grow (Think Galaxy or iPhone + size compared to their base model) Joy-Cons would still attach to them on the side like they do the current Switch. Sure this might make for some interesting aesthetics but it insures that consumers feel safe buying expensive peripherals and don’t have to worry about buying into an entirely new ecosystem every two years. It would also allow Nintendo to continue to create colored variants and themed Joy-Cons and controllers and consumers maintain that higher level of comfortability that these devices wouldn’t be out dated in the next 18 months.

Because of the continuity with peripherals it would also open up the avenue to only sell the tablet portion of the Switch to consumers as an upgrade. This creates an ideal win / win for Nintendo and the customers because Nintendo could sell the upgrade at a reduced cost i.e. $250 or even $230 which would have a higher average revenue per unit that if Nintendo sold the tablet with Joy-Cons at the $300 SKU. It would allow the consumer to purchase just the tablet if that’s all they wanted and save money in the process. Everyone is happy.

Nintendo could also realize giant costs savings in manufacturing and development by moving to one ecosystem and no longer having to split their focus between the two. The virtual console could also be used to make beloved 3DS games available on the Switch, albeit with slight modifications to work on a single screen.

This Switch is doing things we haven’t seen since the Wii. It’s crossing demographic lines. I’ve seen a lady buy one for her three-year-old son. I’ve also bought one at the store for my mother. Demographics that don’t typically appeal to the PC, Xbox, or PS gamer. With an entry point of $99 I believe this could become one of the greatest selling consoles of all time easily giving the Wii a run for its money. It might take a decade or two but it could even catch up to the DS or PS2.

You may be looking at my website right now and confusing it with a Nintendo fan site. I really couldn’t blame you for that because of all the content surrounding the Switch. But hey, it’s the hot new thing so of course I’m going to talk about it. It’s what gets me excited. Just ask my wife. Don’t worry though. I’ll get back into other stuff soon enough. I plan on putting up and Orcs Must Die Unchained video later this week. Until then.

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